A Response to Michael Wurzer’s Response

It appears that my post earlier today has sparked a response. What is this, 2010? When bloggers discussed things openly on the Internet on their respective blogs? Gosh, I miss those old days.

So in the spirit of that open discussion, I am cross-posting this lengthy comment I left on the FBS Blog.

—–

Thanks for the discussion, Michael. I feel like I can just respond here, but I’ll cross-post to Notorious to make sure anyone who read the original can see these answers as well.

A few things:

1. If your point was that the Feds wouldn’t strip the right of the seller to control where they can or must advertise their home for sale… could I suggest a rewrite? This is literally what you wrote:

If we apply the open banking model to real estate, the seller and/or listing broker would be the one to authorize access, which essentially is exactly what happens today when the seller either goes FSBO or hires a broker to market their listing for them. Now, to be clear, I know there are lots of nuances that people will be quick to put forth about whether the seller, broker, etc., should authorize access, but we don’t need to dive into all that here.”

Since I’m not applying the open banking model, or any model to real estate, and the phrasing of “the seller and/or listing broker” is not as tight as your formulation above, I submit that if I failed to answer your question, it’s because you failed to ask it.

2. Having said that… what is this mysterious right of the seller to control where to advertise? I know for a fact that I have never heard of such a thing through three years of law school and oh a decade or so of worrying about e-commerce… until I got into real estate. For your reference, here’s the FTC guidance on advertising and marketing on the Internet. It’s full of concern about truth in advertising and substantiating claims, but nothing whatsoever about a “right to control WHERE to advertise.”

3. If the real question you asked (because it’s a little difficult to make sense of what it is that you’re precisely asking) is: “The question I posed is why would the federal government take this right away from sellers?” then the answer is: Because it benefits the buyer.

There are already quite a few rules that govern when/how/where advertising can and cannot happen. Almost all of them are for the protection of the BUYER — the guy who brings the money. So the Federal Government, in its infinite wisdom, would decide that protecting Buyers necessitates regulating where/when/how/what Sellers can advertise, and take away a phantom right to control avenues of advertising that doesn’t actually exist anywhere other than in the minds of real estate industry people.

4. If your desire was to “very purposely wanted to counter the idea that the two things (DOJ/FTC review and Black swan ideas) should be linked” then you probably shouldn’t have written sentences like this:

The possibility of federal review probably is scary enough for most people, but then you add on to it wild-eyed speculation by lobbyists such as Daniel Castro of ITIF, a group Inman reports was partially funded by Zillow in the past, and pundits like Rob Hahn, about a federally mandated national listing database, and what was just scary quickly turns into all-out panic.”

See, when you use that word “and” as you did, you LINK the two together. That’s the exact opposite of what you claim you were attempting to do.

And then you write:

“Rob Hahn similarly speculates about a federally mandated national database that is “easily available to all data users, including consumers, Wall Street, government, and academia” but he doesn’t even attempt to address the question of what “easily available” means, including who would authorize that access.”

That word “similarly” doesn’t counter the idea that the two should be linked; in fact, it does the exact opposite.

So forgive me if I thought you were linking the two together.

5. It appears that you didn’t really want one (or more!) questions answered. You wanted to make a point. Specifically, this one:

Instead of thinking about the federally mandated database, my point is that you also need to think about the permissions for accessing that database, because stripping sellers of that right and allowing their house to be advertised all over the place without their right to control it seems incredibly unlikely and counter to the overall goals of accuracy and completeness proposed.

That’s a fine point, and one that is worth engaging with.

Is it incredibly unlikely? Of course it is — hence, the “Black Swanness” of the whole deal.

Is it counter to the original goals of accuracy and completeness? I don’t see how that could be and would love your rationale on how government mandates on submitting data to a government database (as unlikely as it is) makes that database less accurate and less complete.

6. Finally, if I implied that you were sticking your head in the sand, I apologize. I must have gotten confused by the words you actually wrote, instead of the words you were thinking of in your head. But don’t be concerned: it’s all wild-eyed speculation anyhow. Keep calm and carry on!

Having said that, I must tell you that when you write words like “Instead, some control is likely and the most logical place to put that control is in the hands of the seller, exactly where it sits today,” well… there’s a certain whiff of the status quo about the whole thing, isn’t there? I mean, what else to make of “exactly where it sits today?”

I have to go take the wife to a movie, but will check back later to continue the conversation. Thanks again for the response and the opportunity to engage in constructive blog-to-blog dialogue!

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

4 Comments

Join the discussion and state your opinion. Some comments may be held in moderation. I try to get to them as soon as possible, but may be traveling or unable to approve comments immediately. I do not censor comments, but reserve the right to remove anything that looks like spam, trolling, or just outright inappropriate.

I commented over on my blog explaining why I think a federally mandated “open” database doesn’t result in better data for consumers. In short, an open database will be used by lots of people for reasons that don’t benefit the seller, which will result in the seller restricting the most valuable content (e.g., photos, which they own or control through contract) from the “open database”. The end result is buyers lost in a sea of sites with incomplete and perhaps purposefully out-of-date content to generate more click-bait.

Regarding linking your post with the Inman article, the words you quote are me summarizing the Inman article, which is where the two things were linked. Yes, my summary of the Inman article used the word “and” but that’s because the Inman article referenced the FTC/DOJ news and your post. And, yes, your “Black Swan” brainstorm about a federally mandated database is “similar” to Daniel Castro’s proposal for a federally mandated “open” database.

Lastly, thanks for clarifying that you weren’t implying that I was sticking my head in the sand. However, why go on about a “whiff of the status quo,” which seems to imply, again, something negative. There is nothing inherently good or bad about the status quo or Black Swan propositions, the good or bad turns on the substance, and hat’s what I wast trying to dive into by pointing out that “open” databases might sound good on the surface but working through what that really means is important to assessing the efficacy of the approach.

“I commented over on my blog explaining why I think a federally mandated “open” database doesn’t result in better data for consumers. In short, an open database will be used by lots of people for reasons that don’t benefit the seller, which will result in the seller restricting the most valuable content (e.g., photos, which they own or control through contract) from the “open database”. The end result is buyers lost in a sea of sites with incomplete and perhaps purposefully out-of-date content to generate more click-bait.”

Look, that’s a valid argument that we all could make to the DOJ/FTC or whomever should an unlikely event like government takeover of the MLS happen. Chances of that are very low.

But a mandatory database is mandatory. Restricting photos from it, while using it elsewhere for advertising is not going to pass muster unless regulations allow for that. Presumably, minions of GOV aren’t that stupid.

For comparison purposes, think about Fair Housing Act and associated regulations. People can try to be clever to dissuade disfavored minorities from seeing a house for sale; is it ever worth the risk?

As I’ve said, there may be very good reasons why we don’t want to force people to put data into a government database. I can think of several myself. But that doesn’t mean there is some “right” of sellers to control advertising.

On the status quo… yeah, I think it’s not great. Maybe you could take a stab at answering my three questions from the Keep Calm post?

Thanks for the clarification about the wording — could I suggest editing the original post so that it is clear what you’re doing there? One could easily, as I did, assume you were making the link.

Wow. For a moment there I thought I was riding through the Pirates of the Caribbean ride at Disneyland as the ship of the left fired cannons at the fort on the right. For what it is worth, regulating anything that is “business” today has proven to be a rather unpopular idea. I submit that the residential real estate brokerage business has been regulated to the extreme by organized real estate; the NAR,m State Associations and local Board AND especially the MLS. And as such, in contrast to the further regulation suggested, I would argue that the business of real estate brokerage as it exists today needs to be deregulated. I am not convinced that anyone looking at the business objectively would conclude that organized real estate’s constant effort to “level the brokerage playing field” has resulted in creating a more “free”, vibrant and competitive brokerage environment. Begin with the monopolistic, anti-competitive MLS and work right back to the constant meddling that occurs in that big expensive building in Chicago. But then again this industry is made-up of a great number of **cough, cough** widely differing opinions.